A veterans advocacy group says a complete overhaul of the Veterans Affairs health system — to include partially privatizing services — is needed to improve care for current veterans and ensure the system’s future viability.

A report issued by a task force formed by Concerned Veterans For America calls for revamping VA medical facilities under a non-profit government organization and proposes changes that would shift more veterans into private health insurance programs.

The recommendations in “Fixing Veterans Health Care” would “advance long-term reforms of the current system, while addressing the immediate needs of veterans,” said the authors, including Tennessee Republican and former Senate Majority Leader Dr. Bill Frist and former Rep. Jim Marshall, a Vietnam veteran and Georgia Democrat.

According to the task force, the current VA system is broken and unsustainable.

“If proactive and fundamental reforms are not made soon, demographic realities will force further drastic and reactionary changes,” the authors wrote.

Details of the 100-page report were addressed during a five-hour conference on VA health care hosted by CVA in Washington, D.C., on Thursday.

The recommendations included:

*Splitting the Veterans Health Administration into two entities, a hospital system responsible for medical centers and clinics and a health insurance oversight office.

*Closing underutilized health facilities and streamlining services.

*Providing health care at VA medical facilities for veterans with service-connected medical conditions who want to stay in the system; and offering private health coverage to veterans who can’t get to a VA health facility or want to see a private physician.

Under the plan, veterans who have severe disabilities or fall in higher priority groups would get more money to pay for premium health care coverage; lower priority groups would have access to private care but would be required to pay more in cost-shares.

Although Congress passed the Veterans Access Choice and Accountability Act last year that gave VA $15 billion to hire new physicians and let veterans seek private care, CVA officials say the law doesn’t’ go far enough to fix VA’s chronic problems.

“The veterans’ health system is still broken. The VA Choice program does not allow for true choice because VA still determines who can access the program … and in the future, VA is going to see massive underutilization. We need to solve these problems,” said Daniel Caldwell, CVA’s legislative and political director.

“Veterans can go out and get health care when they want it … that’s what we were trying to do with the Choice card. But VA has erected obstacles which … are clearly in violation with the intent of the law,” Sen. John McCain, R-Ariz., said at the summit.

The VA medical system became embroiled in a scandal last year over patient appointment wait times and VA administrators gaming the system to appear to be meeting access standards.

In some cases, veterans waited months for care and some died while on waiting lists.

The troubles brought about passage of the Veterans Access Choice and Accountability Act, which Frist, Marshall and others called a good “first step” but a “temporary one whose funding is expected to run out in a few years.”

“In the end, VACAA has kept the VA bureaucracy in control, and offers few real choices to veterans. This task force seeks to flip that equation. Our proposal puts veterans in control of their health care,” they wrote.

The report’s release quickly drew comments and criticism from those skeptical of its findings and recommendations.

VA Secretary Bob McDonald said taking care of veterans at VA is a “sacred mission,” and added that while outside care should supplement care provided by VA doctors, it should not replace it.

“Reforming VA health care cannot be achieved by dismantling it and preventing veterans from receiving the specialized care and services that can only be provided by VA,” McDonald said.

Paralyzed Veterans of America said it welcomes discussion on veterans health care reform but cautioned against privatized care because it would remove protections veterans have being treated within the VA system.

“Privatizing health care for veterans will create a cottage industry for ambulance chasers who will be the only available option for veterans with medical malpractices cases,” PVA officials said in a release.

Stewart Hickey, national executive director of AMVETS, addressed the summit, saying “most of what is in the report is good.” But he added that persuading other veterans groups to support the plan would be difficult because they are interested in preserving the status quo.

None said they would sponsor a draft version of a bill proposed in the report, the Veterans Independence Act, but agreed that the proposals would start a dialogue about long-term reform of VA health.

Frist and Marshall acknowledged as much in the report. “No plan is perfect. While we believe that our proposal would significantly improve veterans health care, we know the plan would benefit from continued refinement and input from interested parties,” they wrote.

Nearly 9 million veterans are enrolled in VA health care.

According to VA, the department made more than 2 million authorizations for veterans to get care from non-VA providers from May 1, 2014 through Feb. 1, equaling $6.7 billion in care.

The figures represent a 45-percent increase when compared with the same period in previous years.

CVA officials said one of the goals of its recommendations is to steer VA back toward caring primarily for veterans with service-connected conditions.

“Eligibility would be limited to service-connected disabilities and those who are indigent. VA health was never intended to be an entitlement program,” Caldwell said.

Since its creation in 2012, CVA has drawn attention for its outspoken criticism of President Obama and held a summer-long “defend freedom” tour that decried current government policies, with members saying those policies undermine both military and economic security.

In turn, the group has been criticized for receiving most of its financial backing from conservative political groups.

Officials noted that the report has bipartisan authorship and support and urged lawmakers to read it and consider its recommendations.

“[Fixing VA] has to be a bipartisan project … similar to when we passed welfare reform. This is an important report that creates a large structural proposal for how you really put veterans first,” former Speaker of the House Newt Gingrich said.

“Tonight, I’m launching a new Precision Medicine Initiative to bring us closer to curing diseases like cancer and diabetes — and to give all of us access to the personalized information we need to keep ourselves and our families healthier.”

— President Barack Obama, State of the Union Address, January 20, 2015

President Obama has long expressed a strong conviction that science offers great potential for improving health. Now, the President has announced a research initiative that aims to accelerate progress toward a new era of precision medicine (www.whitehouse.gov/precisionmedicine). We believe that the time is right for this visionary initiative, and the National Institutes of Health (NIH) and other partners will work to achieve this vision.

The concept of precision medicine — prevention and treatment strategies that take individual variability into account — is not new1; blood typing, for instance, has been used to guide blood transfusions for more than a century. But the prospect of applying this concept broadly has been dramatically improved by the recent development of large-scale biologic databases (such as the human genome sequence), powerful methods for characterizing patients (such as proteomics, metabolomics, genomics, diverse cellular assays, and even mobile health technology), and computational tools for analyzing large sets of data. What is needed now is a broad research program to encourage creative approaches to precision medicine, test them rigorously, and ultimately use them to build the evidence base needed to guide clinical practice.

The proposed initiative has two main components: a near-term focus on cancers and a longer-term aim to generate knowledge applicable to the whole range of health and disease. Both components are now within our reach because of advances in basic research, including molecular biology, genomics, and bioinformatics. Furthermore, the initiative taps into converging trends of increased connectivity, through social media and mobile devices, and Americans’ growing desire to be active partners in medical research.

Oncology is the clear choice for enhancing the near-term impact of precision medicine. Cancers are common diseases; in the aggregate, they are among the leading causes of death nationally and worldwide, and their incidence is increasing as the population ages. They are also especially feared, because of their lethality, their symptoms, and the often toxic or disfiguring therapies used to treat them. Research has already revealed many of the molecular lesions that drive cancers, showing that each cancer has its own genomic signature, with some tumor-specific features and some features common to multiple types. Although cancers are largely a consequence of accumulating genomic damage during life, inherited genetic variations contribute to cancer risk, sometimes profoundly. This new understanding of oncogenic mechanisms has begun to influence risk assessment, diagnostic categories, and therapeutic strategies, with increasing use of drugs and antibodies designed to counter the influence of specific molecular drivers. Many targeted therapies have been (and are being) developed, and several have been shown to confer benefits, some of them spectacular.2 In addition, novel immunologic approaches have recently produced some profound responses, with signs that molecular signatures may be strong predictors of benefit.3

These features make efforts to improve the ways we anticipate, prevent, diagnose, and treat cancers both urgent and promising. Realizing that promise, however, will require the many different efforts reflected in the President’s initiative. To achieve a deeper understanding of cancers and discover additional tools for molecular diagnosis, we will need to analyze many more cancer genomes. To hasten the adoption of new therapies, we will need more clinical trials with novel designs4 conducted in adult and pediatric patients and more reliable models for preclinical testing. We will also need to build a “cancer knowledge network” to store the resulting molecular and medical data in digital form and to deliver them, in comprehensible ways, to scientists, health care workers, and patients.

The cancer-focused component of this initiative will be designed to address some of the obstacles that have already been encountered in “precision oncology”: unexplained drug resistance, genomic heterogeneity of tumors, insufficient means for monitoring responses and tumor recurrence, and limited knowledge about the use of drug combinations.

Precision medicine’s more individualized, molecular approach to cancer will enrich and modify, but not replace, the successful staples of oncology — prevention, diagnostics, some screening methods, and effective treatments — while providing a strong framework for accelerating the adoption of precision medicine in other spheres. The most obvious of those spheres are inherited genetic disorders and infectious diseases, but there is promise for many other diseases and environmental responses.

The initiative’s second component entails pursuing research advances that will enable better assessment of disease risk, understanding of disease mechanisms, and prediction of optimal therapy for many more diseases, with the goal of expanding the benefits of precision medicine into myriad aspects of health and health care.

The initiative will encourage and support the next generation of scientists to develop creative new approaches for detecting, measuring, and analyzing a wide range of biomedical information — including molecular, genomic, cellular, clinical, behavioral, physiological, and environmental parameters. Many possibilities for future applications spring to mind: today’s blood counts might be replaced by a census of hundreds of distinct types of immune cells; data from mobile devices might provide real-time monitoring of glucose, blood pressure, and cardiac rhythm; genotyping might reveal particular genetic variants that confer protection against specific diseases; fecal sampling might identify patterns of gut microbes that contribute to obesity; or blood tests might detect circulating tumor cells or tumor DNA that permit early detection of cancer or its recurrence.

Such innovations will first need to be tested in pilot studies. We will initially want to take advantage of the rare settings where it is already possible to collect rich information through clinical trials, electronic medical records, and other means.

Ultimately, we will need to evaluate the most promising approaches in much larger numbers of people over longer periods. Toward this end, we envisage assembling over time a longitudinal “cohort” of 1 million or more Americans who have volunteered to participate in research. Participants will be asked to give consent for extensive characterization of biologic specimens (cell populations, proteins, metabolites, RNA, and DNA — including whole-genome sequencing, when costs permit) and behavioral data, all linked to their electronic health records. Qualified researchers from many organizations will, with appropriate protection of patient confidentiality, have access to the cohort’s data, so that the world’s brightest scientific and clinical minds can contribute insights and analysis. These data will also enable observational studies of drugs and devices and potentially prompt more rigorous interventional studies that address specific questions.

Such a varied array of research activities will propel our understanding of diseases — their origins and mechanisms, and opportunities for prevention and treatment — laying a firm, broad foundation for precision medicine. It will also pioneer new models for doing science that emphasize engaged participants and open, responsible data sharing. Moreover, the participants themselves will be able to access their health information and information about research that uses their data.

The research cohort will be assembled in part from some existing cohort studies (many funded by the NIH) that have already collected or are well positioned to collect data from participants willing to be involved in the new initiative. Creating this resource will require extensive planning to achieve the appropriate balance of participants, develop new approaches to participation and consent, and forge strong partnerships among existing cohorts, patient groups, and the private sector. It will also be crucial to carefully examine the successes and shortfalls of other longitudinal cohort studies.

Achieving the goals of precision medicine will also require advancing the nation’s regulatory frameworks. To unleash the power of people to participate in research in innovative ways, the NIH is working with the Department of Health and Human Services to bring the Common Rule, a decades-old rule originally designed to protect research participants,5 more in line with participants’ desire to be active partners in modern science. To help speed the translation of such discoveries, the Food and Drug Administration is working with the scientific community to make sure its oversight of genomic technology supports innovation, while ensuring that the public can be confident that the technology is safe and effective.

Although the precision medicine initiative will probably yield its greatest benefits years down the road, there should be some notable near-term successes. In addition to the results of the cancer studies described above, studies of a large research cohort exposed to many kinds of therapies may provide early insights into pharmacogenomics — enabling the provision of the right drug at the right dose to the right patient. Opportunities to identify persons with rare loss-of-function mutations that protect against common diseases may point to attractive drug targets for broad patient populations. And observations of beneficial use of mobile health technologies may improve strategies for preventing and managing chronic diseases.

Ambitious projects like this one cannot be planned entirely in advance; they should evolve in response to scientific and medical findings. Much of the necessary methodology remains to be invented and will require the creative and energetic involvement of biologists, physicians, technology developers, data scientists, patient groups, and others. The efforts should ideally extend beyond our borders, through collaborations with related projects around the world. Worldwide interest in the initiative’s goals should motivate and attract visionary scientists from many disciplines.

This initiative will also require new resources; these should not compete with support of existing programs, especially in a difficult fiscal climate. With sufficient resources and a strong, sustained commitment of time, energy, and ingenuity from the scientific, medical, and patient communities, the full potential of precision medicine can ultimately be realized to give everyone the best chance at good health.

What’s in an EHR? As the Department of Defense prepares to select a new electronic health record system, some are advocating that it go with an open-source solution—not just to benefit of the DOD but to use the $11-billion program to benefit the healthcare industry at large.

Why it matters to the DOD

Most commercial EHR systems are developed around FFS, which is not particularly relevant to the DOD.

In a new report released by the Center for New American Security titled “Reforming the Military Health System,” the authors argue that the selection of a closed, proprietary system would trap the DOD into vendor lock, health data isolation and a long-term contract with technology that will age rather than evolve.

Co-author Stephen L. Ondra, a former senior advisor for health information in the White House Office of Science and Technology Policy, tells Healthcare Dive that an open-source solution could more easily adapt to meet future modernization and interoperability needs, and could more creatively be tailored to the DOD’s requirements.

Ondra says most commercial EHR systems are developed around the fee-for-service revenue cycle, a model that is not particularly relevant to the DOD and its healthcare system. He says an EHR for the DOD should be focused on the clinical care management aspect of these programs, which would require lengthy and expensive modification.

He argues that a proprietary system would be inadequate as it would leave the DOD with a single vendor’s solutions. “You don’t have some of the creativity and innovation that an open source system would have because you’re limited to a single vendor’s view and skills,” Ondra says.

In addition, he notes, proprietary systems have less incentive to provide interoperability solutions because their business model aims to lock people into using that particular system.

“I think the commercial systems are very good at what they do,” Ondra said. However, “they are not ideally designed for efficiency and enhancement of care delivery, and I think the DOD can do better with an open source system both in the near-term, and more importantly in the long-term, because of the type of innovation and creativity that can more quickly come into these systems.”

Why it matters to everyone

“If the DOD goes with a closed, proprietary system, it could stifle innovation in the industry.”

Whoever gets that $11-billion award is going to have a lot of money to develop EHR technology—and whether they are serving an open or closed solution will determine whether the innovations remain stovepiped from the rest of the industry, notes report author Peter L. Levin, a former chief technology officer at the Department of Veterans Affairs.

“If the DOD were to choose to go with a closed, proprietary system, it has the potential of stifling innovation in the rest of the industry,” Levin says. “If they go with an openly-architected, standard space and modular system, then really in a very simple way, they are spreading the innovation resources around.”

“Instead of concentrating it all in one place and letting that vendor own all of the innovation, they’ll be able to nourish and support the various components that comprise these complicated enterprise resource platforms in a way that will not only be beneficial to the DOD and the country in the long run, but will tremendously benefit the country and other kinds of innovations now,” Levin said.

Imagine if consumers could only talk to people with same phone carrier.

Levin adds that the same arguments for the DOD to select an open-source EHR system apply to private healthcare systems as well. He asks consumers to imagine if they could only talk to people with same phone carrier, or only go to gas stations for their particular make of car.

He argues that private hospitals and private payers have been unwittingly supporting the continued isolation and segmentation of the commercial solutions.

“Healthcare suffers tremendously in terms of cost and outcome because of these isolated systems,” he says, “and that’s just as true for the private sector as it is for the public sector.”

Ondra adds that the DOD’s choice will set an example from which both open and closed source providers could learn.

“I think that a major government contract would send the message that the current systems, as good as they are, are not fully meeting the needs of clinical care in a way that is efficient for the provider,” he says.

“Going to an open source for the DOD gives the opportunity to have rapid development of things that are more helpful to care delivery, more efficient for the provider, because the customer then is the deliverer of care, and not the finance department of a care delivery system,” Ondra said.

“I would have written a shorter letter but did not have the time,” Blaise Pascal, the 17th century French mathematician and philosopher, once apologized. Unfortunately, the same problem often arises when physicians manage the care of patients with chronic conditions such as diabetes, heart failure, and kidney disease. If they had more time (and in some cases, motivational skills), they could better persuade patients to make the sacrifices and hard choices to change their lifestyles and to follow the recommended treatment plan.

Pressuring physicians to maximize the number of patients they see and minimizing the time they spend with each is one of five counterproductive mistakes that health care providers often make in trying to reduce costs — the subject of a recent article in the Harvard Business Review.

Overworked physicians rarely have the time for these difficult conversations, especially when they are restricted to 20- to 30-minute appointments, with much of the front end spent updating a patient’s medical record. When physicians spend an inadequate amount of time with their patients, the patients may not fully understand the importance of complying with all aspects of their recommended treatments, which eventually leads to deteriorating health and higher treatment costs. Approximately 50% of patients with chronic conditions do not take their medications as prescribed.

To illustrate the problem, consider our research on the cost of treating patients when their kidneys begin to lose their ability to filter blood. Should the kidneys of a patient with such a chronic disease completely fail when a transplant is not immediately available, the person needs dialysis several times a week to filter and clean the blood. How the patient starts on dialysis has enormous health and cost implications.

The vast majority of patients should do peritoneal dialysis at home or start with hemodialysis at a dialysis center. Both approaches require a vascular surgeon to create a fistula or a graft to connect an artery and a vein in the forearm. The surgery must be performed well before dialysis starts since a fistula can take about three months and a graft several weeks to “mature,” or be ready to be used for dialysis. (The alternatives are having either a preemptive kidney transplant or a peritoneal dialysis catheter placed, which also require advance planning.) If dialysis is required and a matured graft or fistula is not available, the patient must start with a catheter inserted into a vein in the neck or chest, a process that leads to a much higher risk of infection, blood clotting, and death.

Despite the large health benefits from an optimal dialysis start, more than 50% of patients nationwide begin dialysis via a catheter. Some of these occur because primary care physicians wait too long to refer their patients to nephrologists. Once referred, many patients are in denial that they will need dialysis or that they will need it as soon as actually occurs. Such patients may not adequately prepare for this eventuality despite a timely recommendation by their nephrologist.

To understand these issues better, we formed a project team to study patients that started on dialysis in 2011 and 2012. It analyzed historical data of 167 patients insured by Kaiser Permanente in the Georgia Region, and used time-driven activity-based costing to assess the costs of care received one year prior to the start of dialysis and also the charges incurred for one year after starting dialysis. We learned that health complications in the year following a sub-optimal start of dialysis led to nearly $20,000 in extra treatment costs per patient.

Interestingly, the patients in our study who started on dialysis with a fistula or graft largely had the same breadth of nephrology care — number of nurse visits, nephrologist phone calls, care manager coordination, classes, and initial consults — during the one year prior to the commencement of dialysis as those who started sub-optimally with a catheter. Even including the extra cost of the vascular surgery, the costs of treating the two sets of patients before dialysis began were about the same.

A few differences did exist between the two sets of patients, likely reflecting the better compliance of patients that started dialysis optimally. Patients with an optimal start received, on average, one more follow-up visit (5 vs. 4) with the nephrologist. Patients who started optimally were also somewhat more likely to have attended a class to learn about the options for starting on dialysis and were more likely to have attended the class farther ahead of the start of dialysis.

Dr. Nirvan Mukerji, a nephrologist and a coauthor of this article, believes that he could significantly increase the percentage starting optimally if he could spend an additional 30 minutes with each patient, counseling them on how to best prepare for dialysis as their kidney disease progresses. While his full schedule had previously prevented him from spending that additional time, he is now testing the use of extended office visits for patients with advanced chronic kidney disease as well as alternative options, such as having patients already on dialysis make presentations with him at the education class. We estimated that the incremental cost for the extended meeting or the educational class presentation would be under $200, a small price to pay to avoid the health risks and $20,000 in higher treatment costs that typically occur in the first year after a patient starts dialysis sub-optimally.

There are many other examples of how primary care doctors treating chronic diseases, such as diabetes and congestive heart failure, could offer better advice and achieve better treatment compliance if they had more time to spend with their patients. The costs of such extra time would be repaid many times over, often by orders of magnitude, through fewer future complications. Attempting to improve a physician’s productivity by placing arbitrary limits on length of appointments or setting high targets for the numbers of patients that he or she should see each day lowers costs at the front end of a care cycle. But they incur much higher costs later in the cycle when preventable complications are treated in emergency rooms and intensive care units.

Derek A. Haas is a project director and fellow at HBS and a founder of Avant-garde Health.

Yudit C. Krosner is director of specialty-care strategy and practice management at the Southeast Permanente Medical Group in metropolitan Atlanta.

Nirvan Mukerji, MD, is a practicing nephrologist and the chief of nephrology in the Southeast Permanente Medical Group in metropolitan Atlanta.